Resources & Energy : Magmatic Nickel Sulphides Confirmed at East Menzies

REZ.AX

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ASX/Media Release

11th January 2022

Magmatic Nickel Sulphides Confirmed at East Menzies Springfield Project

Resources & Energy Group Limited (ASX: REZ or the Company) report the outcome of a petrological and lithogeochemical study which was carried out on three drill holes (SFRC01, SFRC04 and SFRC05) selected from a suite of nine Reverse Circulation (RC) drill holes completed at the Springfield Prospect during 2021. On the basis of mineralogy, geochemistry, and textural attributes, seven of the samples in two of the holes examined contained recrystallised Ni‐Fe sulphides of primary magmatic origin.

The confirmation of magmatic Ni‐Fe sulphide mineralisation is a significant and material exploration result for the Springfield Project and the East Menzies Package in general. It allows for the possibility that the ultramafics and nearby lithologies may host larger accumulations of disseminated and massive Ni‐Fe sulphides.

DISCUSSION

The Springfield area was identified by the Company following a review of historical exploration and gold mining activities. The documented occurrences of sulphides north of Springfield at Cepline, were also considered to be prospective features for the occurrence of magmatic nickel sulphides, volcanic exhalative nickel sulphides and base metals deposits. The company has targeted these occurrences rather than the shallow near‐surface lateritic nickel deposits, which have been subject of previous investigation at East Menzies and elsewhere in the broader Menzies region.

The petrological studies were carried out on selected RC chip samples to follow up previously reported nickel, cobalt, chromium, zinc, copper, and molybdenum results obtained from the initial Springfield scout drilling program, refer figure 1 and ASX release dated 2‐11‐2021 for details. This work included the following peak down the hole assays:

Complete results including assays, collar details and supporting JORC check list are presented in Appendix 1 and 2 respectively. At the time these results were reported by the Company, the form or mode of occurrence in which these metals were present was not known and required petrological assessment to understand the significance of the mineralised intervals. In this connection, the Company engaged a leading industry expert‐ Ben Grguric to evaluate the samples and provide an overall assessment of the prospectivity of the results, with focus on magmatic nickel mineralisation.

Some key observations from the petrographic work completed by Dr Grguric were the identification of Ni‐Fe sulphides namely pentlandite, violarite, smythite and gersdorffite. These minerals were present either in the form of discrete grains and blebs and in one sample, SFRC01 98‐99 m (assaying 1.78% Ni), in net‐textures associated with pyrrhotite. These sulphides were hosted in komatiites, metapyroxenite and strongly‐silicified komatiites (birbirites). Petrographic and selected geochemical details for the samples examined in the study are presented in Table 1, photomicrographs with mineralogy of selected polished thin sections are shown in Plates 1 and 2.

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Figure 1 Drill Hole Location Plan‐showing significant results

Pentlandite, is a nickel iron sulphide mineral and is a principal source of nickel; violarite and smythite are supergene nickel and iron sulphide minerals associated with the partial weathering and oxidation of primary pentlandite and other nickel sulphide minerals. Gersdorffite is a nickel arsenic sulphide mineral. Collectively, the identification of these minerals at Springfield indicates that the ultramafic rocks within the Project area may host larger accumulations of disseminated and massive Ni‐Fe sulphides.

Table 1 Petrographic data and selected geochemistry for Springfield RC drill holes

Where assay data were available, platinum and palladium anomalism were found to be coincident, and it is concluded on the basis of mineralogy, geochemistry and textures that the referenced samples in Table 1 contained recrystallised Ni‐Fe sulphides of primary magmatic origin. One sample, SFRC05 36‐37m, was selected for petrography on the basis of its elevated Ni content (1.29%), refer Table 1. It was found to be extensively weathered to saprock/saprolite with no preserved sulphides. The elevated

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Ni content in this sample may possibly be due to lateritic enrichment, however, it is noted that there is also anomalous Au and PGE geochemistry in this hole from 39m down the hole (8m@ 0.6% Ni, 0.31ppm Au and 42.5ppb (Pt+Pd) as well (Appendix 1). This suggests that there could be a component of magmatic Ni in the upper part of SFRC05 which has since been overprinted by surface weathering.

The three RC drill holes examined in the study represent points of observation over a strike length of approximately 600 m and allow for hypothesis that the same ultramafic units elsewhere in the Menzies package could be host to larger accumulations of magmatic Ni sulphides.

There has been a general although not unanimous view that the Ni‐Fe sulphide potential of the Menzies area had been exhausted by previous exploration. However, these earlier investigations have been primarily focussed on lateritic resources. In a regional context, there are two notable exceptions where magmatic sulphides have been reported from interpreted strike extensions of the Menzies package by Ardea Resources at Ghost Rocks to the north, and the Highway Project to the south (Ardea Resources ASX announcement 30‐9‐2020). The confirmation of Ni‐Fe sulphides at Springfield at shallow depths along a significant strike interval is an important and material exploration result. This observation provides a great boost to the prospectivity of the Springfield Project and the East Menzies package overall.

NEXT STEPS

The Company is awaiting receipt of multi‐element and gold/platinum group element assays from the December 2021 drilling programme. These results are expected in the next few weeks. The outcome from this work will enable the company to develop a suitable exploration program over this part of the project area.

Plate 1 Reflected light microscope image of a sulphide bleb from sample SFRC01 104‐105m consisting of pentlandite (pn) and lamellar pyrite‐marcasite (py‐mc) after pyrrhotite. Matrix is tremolite (trm). Field of view is 0.6 mm.

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Plate 2 Reflected light microscope image of net‐textured sulphides from sample SFRC01 98‐99m consisting of pentlandite (pn) extensively replaced by supergene violarite (viol), intergrown with pyrrhotite (po) and pyrite (py). Field of view is 0.6 mm.

Competent Persons Statement and Consent

The information in this release that relates to Exploration Results is based on and fairly represents information compiled by Mr. Michael Johnstone Principal Consultant for Minerva Geological Services (MGS). Mr Johnstone is a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the reporting of Exploration Results to qualify as a Competent Persons as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Johnstone consents to the inclusion in this release of the matters based on their information in the form and context in which it appears.

ABOUT RESOURCES AND ENERGY

Resources and Energy Group Limited (ASX: REZ) is an independent, ASX‐listed mineral resources explorer, and miner with projects located in premier mining jurisdictions in Western Australia and Queensland. In Western Australia, the company's flagship is the East Menzies Gold project (EMGP), situated 130km north of Kalgoorlie. The EMGP represents a +100km2 package of contiguous mining, exploration, and prospecting licenses, which are located within a significant orogenic lode gold province, refer figures 2 and 3.

For resource growth, the company's focus is presently exploring the eastern and southwestern sides of the project area (Gigante Grande and Springfield Prospects). On the western side of the project area studies to investigate opportunities for renewed mining operations in M29/189 Granny Venn, M29/141 Goodenough, and M29/427 Maranoa have commenced. Most recently the company completed grade control drilling within the Granny Venn open pit and has resumed mining operations at the Granny Venn Open Pit Gold Mine. As of End July 2021, the Company has combined gold and silver resources (JORC 2012) of 192k oz Au and 862k oz Ag; refer to table 2.

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In Queensland, the company has a 12km2 Mineral Development Licence over the Mount Mackenzie Mineral Resource and retains a further 15km2 as an Exploration Permit. These Development and Exploration Licences are in the Connors‐Auburn Arc and are prospective for high, intermediate, and low sulphidation gold and base metals mineralisation. The current resource has been estimated at 3.42Mt @ 1.18g/t gold and 9g/t silver for a total of 129,000 oz gold and 862k oz silver. A metallurgical test program is currently underway to investigate processing options for primary mineralisation below the current resource extents.

Table 2 Gold and Silver Resource Summary

Figure 3 East Menzies Gold Project Regional Location Plan

1) ASX Release 19 May 2020, (2) ASX Release 3 November 2020, (3) ASX Release 19 February 2021, (4) ASX Release 22 November 2018

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Resources & Energy Group Limited published this content on 10 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 January 2022 22:57:01 UTC.